Corn shortage idles 20 ethanol plants

Source: By Jim Salter | ASSOCIATED PRESS FEBRUARY 11, 2013 • Posted: Monday, February 11, 2013

Fuel is plentiful, but long drought could cut supply

ST. LOUIS — The persistent drought is taking a toll on producers of ethanol, with corn becoming so scarce that 20 ethanol plants have halted production.

The Renewable Fuels Association, a trade group, provided data showing that of the nation’s 211 ethanol plants, 20 have ceased production over the past year, including five in January. Most remain open, with workers performing maintenance-type tasks. But ethanol production probably won’t resume until after 2013 corn is harvested in late August or September.

Industry experts don’t expect a shortage — millions of barrels are stockpiled and the remaining 191 plants are still producing. Still, there is growing concern about what happens if the drought lingers through another corn-growing season.

America’s ethanol industry has taken off in the past decade. Plants in 28 states produce more than 13 billion gallons of ethanol each year, said Geoff Cooper, vice president for research at the association. By comparison, in 2002, the industry produced 2.1 billion gallons. Today, roughly 10 percent of the US gasoline supply is made up of the biofuel.

About 95 percent of US ethanol is made from corn. The National Corn Growers Association estimates 39 percent of the US corn crop is used in ethanol production.

The drought began before planting and never stopped. Even though more acres were planted in 2012 compared to 2011, about 13 percent less corn was harvested.

Cooper said the 20 plants employ roughly 1,000 workers combined, but it wasn’t known how many have been laid off.

The production stoppages are cutting into ethanol production. The 770,000 gallons per day produced in the last full week of January were the fewest since the Energy Information Administration began tracking weekly data in June 2010.

That’s not much of an issue for consumers, at least for now, because there are plenty of stockpiles of ethanol.

A Purdue University agricultural economist, Chris Hurt, said the nation has more than 20 million barrels of ethanol in stock, slightly more than a year ago, largely because Americans are driving less and are driving more fuel-efficient cars. Cooper said, though, that stockpiles are expected to dwindle in the spring and summer.

Officials at the nation’s leading ethanol makers, Archer Daniels Midland and POET, declined to speculate about whether additional plants will close.